Bankruptcy Means Test Calculator: How It Works

This calculator estimates whether your income passes the Chapter 7 bankruptcy means test, based on your state’s median income and your monthly expenses. You enter your household size, state, monthly income, and certain allowed expenses; the calculator tells you whether you likely pass or fail the first part of the test. It uses the standard formula from the U.S. Bankruptcy Code, but you must verify the current median income figures for your state with the U.S. Trustee Program.

Formula

The means test has two parts. The first part (which this calculator handles) compares your current monthly income—averaged over the last six months—to the median income for a household of your size in your state. The formula is:

Current monthly income × 12 > State median income for household size?

If your annualized income is above the median, you fail this first part and must proceed to Part 2 (the expense deduction test). If it is at or below the median, you pass and can file Chapter 7 without further income scrutiny. Variables:

• Monthly gross income – your average monthly income from all sources over the past six months (before taxes).
• State median income – the annual median income for a household of your size in your state, published by the U.S. Trustee Program (updated periodically).
• Household size – number of people in your household (you, spouse, dependents).
• Monthly allowed expenses – used only in Part 2; not needed for Part 1 but included here for completeness.

Worked Example

Using the default values: monthly income = $5,000, state median = $60,000, household size = 4, expenses = $2,000.

1. Annual income = $5,000 × 12 = $60,000.
2. Compare $60,000 to the state median of $60,000.
3. Since $60,000 is not greater than $60,000, the result is Pass.

The calculator shows “Pass� because your income does not exceed the median. If your annual income were $61,000, you would fail Part 1 and need to calculate Part 2.

How the Means Test Works in Practice

The means test is a two-step process required by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. Step one is the median income test described above. If you fail, step two subtracts a list of allowed expenses (based on IRS national and local standards) from your monthly income. If what remains is less than a threshold amount, you still qualify for Chapter 7. This calculator only handles step one, because step two requires dozens of expense categories that vary by location and family size.

For example, a single person in California earning $5,000 per month might pass if the state median is $60,000, but a family of six in the same state might fail if the median is higher. The key is that the median income is set by the U.S. Trustee Program, not by the calculator.

How to Use This Calculator Correctly

• Enter your average monthly income from the last six months—include wages, self-employment, rental income, unemployment, and any other regular source.
• Select your state and enter the current median income for your household size from the U.S. Trustee’s website (they publish a table with columns for 1, 2, 3, and 4+ person households).
• Enter your household size—count yourself, your spouse, and any dependents you support.
• For the expenses field, only fill it in if you want a rough idea of Part 2; otherwise leave it at the default.

The result “Pass� means you likely qualify for Chapter 7 based on income alone. “Fail� means you must complete Part 2 to determine eligibility.

Common Mistakes and Misconceptions

• Using take-home pay instead of gross income. The means test uses gross income before taxes and deductions.
• Using a single month’s income. You must average the last six months, even if your income fluctuates.
• Ignoring household size. The median income for a family of four is much higher than for a single person.
• Assuming “failâ€� means you cannot file Chapter 7. Many people who fail Part 1 still qualify after deducting allowed expenses in Part 2.
• Using outdated median income figures. The U.S. Trustee updates them periodically, so always check the latest table.

Limitations of This Calculator

This calculator only performs the median income comparison. It does not compute the full means test because that requires detailed expense data (e.g., housing, utilities, transportation, food, clothing, taxes, insurance) that vary by location and family size. It also does not consider special circumstances like a disabled family member’s medical expenses, which can be deducted in Part 2. For a complete analysis, consult a bankruptcy attorney or use the official U.S. Trustee’s Means Test form (Form 122A-1).

Alternatives to Chapter 7

If the means test shows you fail, you still have options. Chapter 13 bankruptcy allows you to repay a portion of your debts over three to five years, and it has no income limit. You could also negotiate directly with creditors, use a debt management plan, or consider debt settlement. Each option has different effects on your credit and financial future, so weigh them carefully.

Frequently Asked Questions

What is the current median income for my state?

The U.S. Trustee Program publishes a table of median income by state and household size, updated every few months. You can find it on justice.gov/ust. For example, in 2024, the median income for a single person in California was around $70,000, but this changes—always check the latest data.

Does the means test apply to Chapter 13?

No, the means test is only for Chapter 7. Chapter 13 requires that you have enough disposable income to make plan payments, but there is no median income comparison.

What if my income is above the median but my expenses are high?

You may still qualify for Chapter 7 if, after deducting allowed expenses, your disposable income is below a set threshold. This is Part 2 of the means test. The calculator doesn’t handle that, but a bankruptcy attorney can help you calculate it.

Can I include my spouse’s income?

Yes, if you are married and filing jointly. If you are filing individually but live with your spouse, you must include your spouse’s income in “current monthly income� unless you are separated or your spouse’s income is not used to support you.

How often are median income figures updated?

The U.S. Trustee Program typically updates the figures every three to six months, depending on Census data. Always check the date on the table you use.

Is this calculator a substitute for legal advice?

No. It is an educational tool to help you understand the first step of the means test. Only a qualified bankruptcy attorney can give you legal advice about your specific case.

Related

• Specificity From a Confusion Matrix: Formula and Example
• Calculate Relative Error: Formula and Examples
• Calculate Raw Score From Percentile: What You Need

in income | Monthly gross income | $ | 5000 | 0
in state | State median income (annual) | $ | 60000 | 0
in size | Household size | - | 4 | 0
in expenses | Monthly allowed expenses | $ | 2000 | 0
out result | Means test result | - | (income * 12 > state * 1.0) ? "Fail" : "Pass" | 0
out annual | Annual income | $ | income * 12 | 0
out median | State median income | $ | state | 0
out diff | Income vs median | $ | income * 12 - state | 0